12.3Terms & Rights attached to equity shares:
i) The company has only one class of equity shares having a par value of ' 10 each. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject subject to approval of the shareholders in the ensuring Annual General Meeting.
12.4Dividend Proposed :
i) The Board of Directors, in the meeting on 30th May, 2024, have proposed a final dividend of ' 1.5 per equity share for the year ended 31st March, 2024. The proposed is subject to the approval of shareholders at the ensuing Annual General Meeting.
1) Securities premium
Securities premium reflects issuance of the shares by the Company at a premium, whether for cash or otherwise I.e. a sum equal to the aggregate amount of the premium received on shares is transferred to a "securities premium account" as per the provisions of the Companies Act, 2013. The reserve can be utilised in accordance with the provisions of the Act.
2) Retained earnings
The retained earnings reflect the profit of the company earned till date net of appropriations. The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the balance in this reserve, after considering the requirements of the Companies Act. 2013.
1 Rupee Term Loan aggregating to ' 386.13 Lakhs (31st March, 2023 : ' 517.34 Lakhs and 31st March, 2022 : ' 511.20 Lakhs) included in Note 14 (i) and 20(iii) is secured on exclusive charge basis by (a) First Charge by way of hypothecation of moveable fixed asset of the company situated in the Gujarat. (b) Second Charge by way of equitable mortgage of immovable assets of the Company situated in the State of Gujarat.
2 Rupee Term Loan aggregating to ' 175.27 Lakhs (31st March, 2023 : ' 214.51 Lakhs) included in Schedule 14 (i) and 20(iii) is secured on exclusive charge basis by (a) First Charge by way of hypothecation of moveable fixed asset of the company situated in the Gujarat. (b) Second Charge by way of equitable mortgage of immovable assets of the Company situated in the State of Gujarat.
3 Demand Loan aggregating to ' 546.09 Lakhs included in Schedule 20(i) is secured on exclusive charge basis by way of hypothecation of Liquid asset of the promoter of the company.
4 Demand Loan aggregating to ' 983.41 Lakhs included in Schedule 20(i) is secured on exclusive charge basis by way of hypothecation of Liquid asset of the company.
5 Demand Loan aggregating to ' 503.07 Lakhs included in Schedule 20(i) is secured on exclusive charge basis by way of hypothecation of Liquid asset of the company.
6 Working capital facility aggregating to ' 555.87 Lakhs included in Schedule 20(ii) are secured on a pari passu basis by (a) on the current assets of the Company (Present and future) (b) Second charge by the way of exclusive charge on the immovable properties situated in the state of Gujarat and Liquid assets of the company.
7 An unsecured loan from other parties includes loans from directors and NBFC, and the same are repayable on demand at the rate agreed upon in the terms of the agreement. (From Oxyzo financial service a NBFC @ 15% and from director as interest free)
37 DISCLOSURES PURSUANT TO IND AS 19 EMPLOYEE BENEFITS
(a) Define contribution plans:
The Company has certain defined contribution plans in which both employee and employer contribute monthly, at the rate of 12% of basic salary, as per regulations to provident fund set up as trust and to the respective regional provident fund commissioner.
The Company's contributions to provident fund, pension scheme and employee state insurance scheme are made to the relevant government authorities as per the prescribed rules and regulations. The Company's contributions to the above defined contribution plans are recognised as employee benefit expenses in the statement of profit and loss for the year in which they are due.
The Company's contribution to provident, pension, superannuation funds and to employees state insurance scheme aggregating to ' 1.55 Lakhs (Previous year - ' 5.89 lakhs) has been recognised in the statement of profit and loss under the head employee benefits expense [Refer note 30]
(b) Defined benefits plans:
(i) Gratuity
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, or on their superannuation or resignation. However, in case of death of an employee, the minimum period of five years shall not be required. The amount of gratuity payable on retirement is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied by the number of years' service completed.
(ii) Risk exposure to defined benefit plans
The plans typically expose the Company to actuarial risks such as: Investment risk, Liquidity risk, Market risk and Legislative risk.
Actuarial risk:
It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:
Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.
Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.
Variability in withdrawal rates: tf actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.
Investment risk:
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.
Liquidity risk:
Employees with high salaries and long dL1rations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the company there can be strain on the cash flows.
Market risk:
Market risk Is a collective term for risks that are related to the changes and fluctuations of the financial markets One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at 31st March, 2024 by M/s Trueval Consulting. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
(c) Employee Share based Payment Plan
The Company has the share option plan schemes for permanent employees of the Company in the identified grades of employees for respective plans / schemes including any director except promoter or independent directors, nominee directors and non-executive directors or a director who either himself or through relatives or through anybody directly or indirectly holds more than 10% of the outstanding equity shares of the parent company.
[A] ADVAIT EMPLOYEE STOCK OPTION PLAN 2022 (ESOP 2022)
The award value shall be determined as percentage of Total Fixed Pay. The grant shall be at such price as may be determined by the Committee and shall be specified in the Grant letter. The option shall not be transferable and can be exercised only by the employees of the Company.
The number of options to be granted to each eligible employees is determined by dividing the Award Value (amount equivalent to percentage of Annual Fix Pay) by the Fair Value of option provided. The Fair Value of option on the date of each grant is determined by using Black Scholes model.
Note
1 Pricing Formula : Excerise Price is fixed by the committee at the time of granting option
2 Fair Value : The Fair value is calculated by using Black Scholes method
3 Expected Volatility : Volatility was calculated using standard deviation of daily change in stock price.
38 Business combination:
During the year, the company made a strategic investment by acquiring a 100% stake in Advait Greenergy Private Limited at ' 10/-each on 4th July, 2023. This move was aimed at expanding the business in the Green Sector. However, by the year-ending on 31st March, 2024, the company had reduced its holding reduced to 76.31% by issuing fresh equity by Advait Greenergy private Limited (AGPL) to the other investors.
39 Contingent Liabilities and Commitments
The Company's pending litigations comprise mainly claims against the Company, property disputes, proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements.
1 No amount in respect of related parties have been written off/ written back during the year, nor has any provision been made for doubtful debts/ recevables during the year.
2 Related party relationships have been identified by the management and relied upon by the Auditors.
3 Terms and conditions of sales and purchase: the sales and purchase transactions among the related parties are in the ordinary course of business based on normal commercial terms, conditions, market rates, and a memorandum of understanding signed with the related parties.
41 Disclosure as per Ind AS 101 First-time adoption of Indian Accounting Standards:
(a) Overall principle:
The Company has migrated to mainboard from SME on Bombay Stock Exchange, So prepared the opening balance sheet as per Ind AS as of 1st April, 2022 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities.
However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below:
Deemed cost for property, plant and equipment and intangible assets:
The Company has elected to continue with the carrying value of all of its plant and equipment, capital workin- progress and intangible assets recognised as of 1st April, 2022 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
Classification and measurement of financial assets:
The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.
Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss . Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year.
ii. Financial liabilities and related transaction cost at amortised cost:
Processing fees on borrowing which were recognised at historical cost under previous GAAP have been recognised at amortised cost under IndAS with the difference been adjusted to opening retained earnings. Under Previous GAAP, transaction costs incurred in connection with borrowings are amortised upfront and charged to statement of profit or loss. Under IND AS, transaction costs are deducted from the initial recognition amount of the financial liability and charged to statement of profit or loss over the tenure of the borrowings using the effective interest rate method.
iii. Defined benefit liabilities:
Under IND AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit and loss
iv. Depreciation of property, plant and equipment
Under the previous IGAAP, The company follow WDV method for calculation of depreciation. Now Company change method of depreciation has been changed from WDV to SLM in compliance with the Indian Accounting Standards applicable to the Company from 1t April 2023.
Accordingly the Written Down Value of the Fixed Assets as on 1st April 2021 were taken as the deemed cost of Property, Plant & Equipment as per Ind AS 101 and the depreciation for the financial years 2021-22 and 2022-23 were recalculated. Depreciation was reduced in 2021-22 by ' 10.28 Lakhs and in 2022-23 by ' 181.05 lakhs. The effect of reduction of depreciation has been been recorded in Retained Earnings.
v. Deferred Tax
Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. IND AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of IND AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Previous GAAP.
vi. Other comprehensive income:
Under IndAS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as 'other comprehensive income' includes re-measurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.
vii. Remeasurement of gratuity recognised in other comprehensive income
Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability I asset and are recognised in other comprehensive income. Under previous GAAP, actuarial gains and losses were recognised in statement of profit and loss.
viii. Fair valuation of investment in equity recognised in other comprehensive income
Under Ind AS, Investment in unqouted equity shares of joint venture and subsidaires are valued at cost due to relaxation given in IndAS 101. Quoted equity and mutual fund is classified for fair value through other comprehensive income. Under previous GAAP, investment are carried at cost.
42 As the Company's business activity, in the opinion of the management, falls within a single primary segment subject to the same risks and returns, the disclousre requirements as per IndAS-108 "Segment Reporting" issued by the Ministry of Corporate Affairs. However, the company has a geographical turnover and hence it require to be reported.
43 Financial instrument and risk management (a) Capital management
The Company manages its capital structure in manner to ensure that it will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.
The Company's capital structure is represented by equity (comprising issued capital, retained earnings and other reserves as detailed in notes 12 and 13) and debt (borrowings as detailed in note 20).
The Company's management reviews the capital structure of the Company on an annual basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The Company's plan is to ensure that the gearing ratio (debt equity ratio) is well within the limit of 2:1.
Debts is defined as all long term debt outstanding (including unamortised expense) + Contingent liability pertaining to corporate I financial guarantee given + Short term debt outstanding in lieu of long term debts.
Total Equity is defined as Equity share capital+ all reserve (excluding revaluation reserve) + deferred tax liabilities - deferred tax assets - intangible assets - intangible asset under development.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fa ir value that are either observable or unobservable and consists of the following three levels:
Level 1: Inputs are Quoted (unadjusted) market prices in active markets for identical assets or liabilities. This includes quoted equity instruments, investments in mutual funds that have quoted price.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. This includes unquoted floating and fixed rate borrowing.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. This includes unquoted equity shares, loans, security deposits, investments in Debentures, floating rate borrowings.
(d) Fair value of financial assets and liabilities measured at amortized cost
The Management has assessed that fair value of loans, trade receivables. cash and cash equivalents, other bank balances, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to their short-term nature. Difference between carrying amount of Bank deposits, other financial assets, borrowings and other financial liabilities subsequently measure significant in each of the years presented.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair.
(e) Financial risk management
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The board has established the key management personnel, which is responsible for developing and monitoring the Company's risk management policies. The key management personnel holds regular meetings and report to board on its activities.
The Company's risk management policies are established to identify and analysis the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The board of directors oversees the following risk how key management personnel monitor compliance with the Company's risk management polices and procedures;
(A) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables involving instruments affected by market risk include loans and borrowings, trade receivables and trade payables involving foreign currency exposure. The sensitivity analyses in the following sections relate to the position as at March 31,2024 and March 31,2023.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31,2024 and March 31,2023
(i) Foreign currency exchange rate risk
Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate. The company is exposed to foreign currency risk due to import of materials. The company measures risk through sensitivity analysis. No outstanding amount is payable for purchase of imported material as on March 31,2024.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's debt obligations with floating interest rates. As the Company has certain debt obligations with floating interest rates, exposure to the risk of changes in market interest rates are dependent of changes in market interest rates. Management monitors the movement in interest rate and, wherever possible, reacts to material movements in such rates by restructuring its financing arrangement.
As the Company has no significant interest bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates.
(B) Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness.
Credit risk arises primarily from financial assets such as trade receivables, investments in mutual funds, cash and cash equivalent and other balances with banks.
In respect of trade receivables, credit risk is being managed by the company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business. All trade receivables are also reviewed and assessed for default on a regular basis. The concentration of credit risk is limited due to the fact that the customer base is large.
(C) Liquidity risk
(i) Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.
(ii) Management monitors rolling forecasts of the Company liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which it operates. In addition, the Company's liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans
Maturities of financial liabilities:
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant
45 Code on social security, 2020
The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post- employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The company will assess the impact of the Code when it comes into effect and will record any related impact after the code become effective.
46 The financial statement were approved for issue by the Board of Directors on 30th May, 2024.
47 Previous year's figure have been regroup and rearranged, whenever necessary.
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